Possible Revival of Inflation Crisis Due to Middle East Conflicts | Kanebridge News
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Possible Revival of Inflation Crisis Due to Middle East Conflicts

The IMF warns from the escalating Middle East conflicts that could trigger inflation and disrupt planned interest rate cuts, impacting the global economy.

Wed, Apr 17, 2024 2:40pmGrey Clock 2 min

In its latest World Economic Outlook report, The International Monetary Fund (IMF) has raised concerns that an escalation in the ongoing conflict in the Middle East could potentially lean to an inflationary crisis and disrupt the anticipated decline in interest rates. Such disruptions could negatively impact global economic growth. The IMF also noted that, despite high interest rates, global economic activity has shown unexpected resilience since October 2023, with employment and income levels performing better than anticipated.

Impact of Geopolitical Tensions on Commodity Prices

In this report, the IMF expressed concerns over a possible surge in commodity prices triggered by increased geopolitical tensions in the Middle East. This surge could hinder the current process of disinflation and postpone the easing of central bank policies, which would have negative repercussions for global economic stability.

Additionally, the report warned that the volatility in oil prices has intensified, especially with the Iranian attack on Israel and the uncertain outcomes of potential Israeli responses.

The report also mentioned that continued attacks in the Red Sea and the ongoing Ukraine war may cause further supply shocks, hindering global recovery. Additionally, slower-than-anticipated declines in core inflation due to persistent labor market tightness or a stalling Chinese recovery could also negatively alter economic forecasts.

Economic Projections and Challenges Ahead

The IMF‘s 2024 forecast slightly raises growth by 0.1% from earlier predictions, though growth remains low historically. Euro area growth is expected to improve from 0.4% in 2023 to 0.8% in 2024 and 1.5% in 2025, influenced by the impact of the Ukraine war. U.S. growth is anticipated to rise to 2.7% in 2024 then decrease to 1.9% in 2025 due to fiscal tightening and softer labor markets.

The report emphasizes the resilience of the global economy amidst challenges such as tighter monetary policies, the ongoing effects of the pandemic, geopolitical tensions, and other structural issues impacting long-term growth.

While there are signs of economic resilience and marginal growth improvements, the IMF cautions against potential new crises and the need for vigilant monitoring of global economic trends and policy adjustments.



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Preparatory Work for UAE to Oman Hafeet Rail Project Commences at Full Speed

Preparations have begun on the transformative UAE to Oman Hafeet Rail network, revealing significant construction details during a site visit.

Thu, May 16, 2024 3 min

The $3bn Hafeet Rail project between the UAE and Oman will feature 60 bridges and a 2.5km tunnel, making it an “architectural and engineering marvel,” according to CEO Ahmed Al Musawa Al Hashemi.

Hafeet Rail has announced that preparatory work is moving full speed ahead for constructing the transformative railway link between the UAE and Oman. This announcement was made during a site visit attended by key officials, members of the Asyad and Hafeet Rail executive management teams, project contractors, and consultants.

Key Highlights

During the visit, attendees were introduced to the main components of the project, including passenger, repair, and shipping stations, as well as major bridges and tunnel sites.

The Hafeet Rail project is set to play a very important role in enhancing local and regional trade, unlocking new opportunities in the infrastructure, transportation, and logistics sectors, and fostering economic diversification. It will also strengthen bilateral relations between the UAE and Oman.

The project will involve constructing 60 bridges, some reaching heights of up to 34 meters, and tunnels extending 2.5 kilometres. The Hafeet Rail team showcased the latest rail technologies and innovative engineering and architectural solutions designed to navigate the challenging geographical terrain and weather conditions while maintaining high standards of efficiency and safety.

The rail network will boost various industrial sectors and economic activities and significantly impact the tourism industry by facilitating easier and faster travel between the two countries.

Ahmed Al Bulushi, Asyad Group Chief Executive Asset, noted that the project’s rapid progress reflects the commitment of the UAE and Oman to developing and realizing the project’s multifaceted benefits.

Investment and Future Impact

Al Bulushi added that investments in developing local capabilities and expertise in rail-related disciplines over recent years have enabled the project to reach the implementation phase successfully under the leadership of highly efficient and professional national talent.

Hafeet Rail’s CEO Ahmed Al Musawa Al Hashemi emphasized, “The commencement of preparatory works for construction is a testament to the robust synergy between all parties involved in both nations, achieving this milestone in record time. We are confidently laying down the right tracks thanks to the shareholders of Hafeet Rail and the expertise of local companies in Oman and the UAE, alongside international partners.”

During the site visit, the visitors explored some of the key preparatory sites, including Wadi Al Jizi, where a 700-meter-long bridge towering 34 meters will be constructed. This ambitious project is envisioned as an architectural and engineering marvel in a complex geographical landscape.

Future phases will require more collaboration, with a continued focus on quality, safety, and environmental considerations in line with the international industry best practices.

The Hafeet Rail project represents the first-of-its-kind railway network linking two Gulf nations, marking a significant shift in regional goods transportation. This efficient and reliable transportation option will reduce dependence on slower and less sustainable road transport.

Hafeet Rail promises a 40% reduction in shipping costs and a 50% in transit times compared to traditional land transportation methods, as it will be connecting five major ports and several industrial and free zones in both countries.

This shift will reduce reliance on road transport by cars and trucks and promote more sustainable shipping practices. The establishment of the railway network will also create significant opportunities for SMEs in construction, engineering, and logistics support, acting as a catalyst for economic growth and innovation within the domestic economy.

By linking major ports, the Hafeet Rail project will enable local SMEs to import, export, and distribute their products more effectively, enhancing their market reach and global competitiveness.

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